By CL Jose
Bank sets 18 pc growth target for FY23; controls 7 pc of country’s NR deposits
KOCHI/July 25-2022: The Kochi-headquartered Federal Bank that had remained easy on its branch expansion in the last couple of years, having added just 20 branches in 6 years, has chalked out plans to spread its wings in a big way by entering new geographies.
Top officials of the bank, while interacting with analysts on the first quarter financials the other day, said the bank has already opened 10 branches and will open another 65 branches in the current financial year itself.
As per the management thinking, the bank will be opening shops in 200 to 250 new locations in the three years, beginning April 2022.
Shyam Srinivasan, the long-serving managing director & CEO of Federal Bank, said the bank will move ‘from branch light distribution heavy, to ‘light branch heavy distribution’.
He further explained, “light branch means smaller and compact branches in locations, where we don’t have our flag yet.”
Srinivasan said his bank that currently runs 1291 branches in the country had only one loss-making branch out of the whole lot, in the last financial year.
He recalled his initial period in the office heading the operations of the bank, when he oversaw the opening of 750 branches in a matter of five years.
Capital raise unlikely in FY23
Though the bank will be seeking ratification from its shareholders at its forthcoming general meeting to raise up to Rs4000 crore in Tier 1 capital and up to another Rs8000 crore through the issue of debt instruments, the bank is unlikely to raise fresh funds in the next one year.
Srinivasan said the bank is comfortably capitalised with a CRAR of 14.57 per cent as of June end, 2022.
“We will wait to see how the year shapes up and then we will decide timing, opportunity and price. At this juncture, there are no plans [on capital raising],” Srinivasan said while speaking at the conference call, responding to queries.
Federal Bank currently controls about 7 per cent of India’s non-resident deposit market that is valued at about Rs10 lakh crore.
The bank CEO said Federal Bank that staged a stellar performance with record quarterly profit at Rs601 crore, is all set to witness a growth in the region of 18 per cent in the current financial year.
